Say that I am located in Country X and I buy something from Country Y. I pay using my debit card, and money is deducted from my bank account.
How does the money actually flow to Country Y? What does the process look like?Do banks fly bags of cash over to one another of each month?
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I’m assuming you’re paying in country y currency.
Your bank buys the currency off the international currency exchange (or from your banks foreign currency holdings). Your bank pays the merchant, and charges you for the amount and usually plus a foreign transaction fee.
Theres a difference between currency in circulation and currency used for digital transactions. It’s not a 1 to 1 mapping.
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